A life insurance policy is an important part of any comprehensive financial strategy. While there are many types of life insurance and it’s important to understand what each type does and what it costs, the goal of purchasing any type of life insurance is so that you have the peace of mind knowing your family and dependents can continue to live the way they are accustomed to after you are gone.

The purpose of this blog post is to educate readers on what features make life insurance policies most desirable. Once you have understood these features and how they contribute to the importance of life insurance in your life, you will be in a great place to make solid decisions about purchasing a life insurance policy as per your financial requirements in life.

4 Desirable Features To Look For in a Life Insurance Policy

Long-Term Savings

Long-term investments like life insurance plans help save systematically and create a corpus that can provide for several financial needs you may have in the future, such as building a new home, financing quality schooling for your child, and funding a child’s marriage expenses. In addition, there are several types of life insurance policies that offer monthly pay-outs in the form of annuities, which is a great way to get a handle on and reach retirement goals.

Tax Benefits

Life insurance companies require you to pay regular premiums to keep the policy active. If you have a life insurance policy, you can deduct the money you pay as a tax deduction under Section 80C of the Income Tax Act, 1961. Moreover, a life insurance policy even provides tax-free redemptions on death benefit and maturity proceeds.

Multiple Investment Avenues

If you understand the benefits of life insurance to your finances and how to invest within your financial context, you can plan your investments efficiently. Life insurance providers offer unit-linked investment plans (ULIPs), which are investment instruments that combine investments with life insurance and allow you to invest your capital on market-linked instruments through multiple fund management strategies.

Financial Sustainability

In uncertain times, people often experience a lack of financial security. As a result, the family can suffer if an individual dies and no steady income is coming in. By purchasing a life insurance policy as early as possible in your career, you’re providing for your family’s protection at a point when you may not be around to do so. The life insurance definition describes the obligations an insurance provider has to fulfil in return for the premiums you pay regularly.

Amazing Life Insurance Use Cases for Your Financial Freedom

Your Child’s Quality Education

Indian parents spend lakhs of rupees on their children’s education. To help them save for their children’s education, some parents invest in child insurance plans. These plans are typically Unit Linked Insurance Plans, which grow your investments gradually and help you safeguard the best level of education for your child. When a 35-year-old parent begins contributing ₹ 1 lakh a year to a 15-year child plan with an ₹ 10 lakh sum assured, the parent knows that should he or she die prematurely, the child will receive a lump sum amount to meet their educational needs.

Tackling Critical Health Concerns

Because of the high cost of care, a majority of Indians spend up to 70% of their income on medicines and healthcare. When they contract a major/critical illness, they can no longer work and are not earning income while they are being treated in a costly hospital facility. Critical illness cover provides a lump sum payout upon diagnosis of a serious health issue. Payments are not dependent on having to wait for reimbursement after treatment has been completed. Instead, the insurance policy coverage allows you to access money that can be spent on your immediate care, as you progress through the treatment.

Planning For The Golden Days

Retirement sounds like a great way to spend your golden years away from the stresses of everyday life. Though it can be a peaceful time and an excellent opportunity to pursue hobbies and interests, a monthly income can help you maintain your standard of living during your retirement. It is important to start saving for retirement early on in your career. To build an adequate retirement corpus, it is important to consider your post-retirement financial requirements and invest accordingly. Also, savings through a retirement plan can help you procure a pension that beats inflation and help you pay bills during your retirement.

Things To Consider While Choosing A Life Insurance Policy

Read The Terms

The terms and conditions of an insurance plan contain all the information you need to make an informed decision about which policy is right for you. Be sure that you read the fine print in detail before purchasing any policy.

Check Policy’s Lock-In Period

In some cases, people purchase insurance policies without first doing adequate research, resulting in dissatisfaction with the policy. In such cases, insurance companies usually offer a lock-in period of 15 days in which policyholders can return their policies and select another one.

Available Premium Payment Options

Most insurance providers let you make premium payments in annual, semi-annual, quarterly, or monthly increments. Moreover, the Electronic Check System (ECS) allows you to set up automatic deductions from your bank account.

Final Words

Life insurance is not considered in the same way as other investments. It is usually a person’s last will for his family, children, friends, and other relatives. Thanks to this type of insurance, you can be certain that in case of death all your monetary obligations will be taken care of. This article discusses the importance of life insurance. It also involves various factors to look for, to get the most value out of a current policy or the best one for you.